Smaller Danish banks caught in billion Krona bankruptcy struggle


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Tuesday, 31 May 2011
As the Danish financial sector continues to reel from the effects of the last depression, the gloom is not yet over. It looks like its will really get worse before getting better. A leasing company which borrowed billions from Danish smaller bank is having financial uncertainty. As it is expected that the company might collapse, the banks are holding their nerves for the worse.

The latest from the sector is that while the country's small and medium-sized banks struggle with losses and limited opportunities to find capital and to reduce risks many of them are now getting involved in billion Krona bankruptcy case in a leasing firm SAC Leasing.


The Danish daily, Jyllands-Posten reports of Tuesday that the impending bankruptcy of the leasing firm SAC Leasing, which each year leases over 1,000 vehicles to Danish business and especially the construction industry, is threatening to give some of the country's small and medium-sized banks incurred heavy losses.

It emerged after Roskilde Bank, a smaller bank, has reported that the formerly booming business is heading towards bankruptcy.

According to Jyllands-Posten a creditor list the paper obtained show that SAC Leasing has a total debt of over Dkr1.1 billion.

Besides Roskilde Bank and another collapsed Amagerbanken, which together have nearly half a billion Krona borrowed to the company, a streak of small and medium-sized banks made large loans to SAC Leasing and the company’s Director Rene Ubbesen.

Sparbank and Vestjysk Bank each have respectively Dkr87 and Dkr86 million for good, while also Diba Zealand has a large loans to the ailing company and according to recent figures it stands at Dkr62 million.
This comes in when recently credit rating agencies down graded the credit ratings of Danish banks.
By Team

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